The Treasury is likely to take a back seat in driving devolution deals from now on, according to Labour’s most senior councillor Nick Forbes.
Speaking at the launch of the RSA think-tank’s interim Inclusive Growth Commission report, Cllr Forbes said he had spoken to Treasury officials yesterday.
“There are big challenges around the new government, and it does feel like a new one, about what kind of Treasury we will see,” he said. “I suspect it will be more focused on fiscal management than control of wide policy agendas, which poses the question of who is in charge of the devolution agenda?
“Before, that was very much George Osborne, but who will drive it in the future and how will it be brought together?”
Cllr Forbes, who is also Newcastle City Council leader, told LGC he thought the Treasury was not hostile to devolution but was content to leave it to the Department for Communities and Local Government.
LGC reported on Tuesday how prime minister Theresa May said she was “absolutely committed” to devolution and will ensure the “whole machinery of government gets behind” the Northern Powerhouse initiative.
The outcome of the June referendum on Britain’s membership of the European Union – in which Core Cities UK leaders campaigned for a ‘remain’ vote – now presented “an opportunity for a different kind of constitutional settlement”, Cllr Forbes told attendees.
He explained: “We shouldn’t just think of powers being transferred back [from the EU] just to Whitehall and Westminster, but be determined they come to us as we think we can exercise them judiciously.”
Judith Blake (Lab), chair of the Core Cities group and leader of Leeds City Council, said: “When powers come down to us, it’s up to us to make sure those powers also go down into our communities. Too often people are seen as problems not assets.”
Referring to the Northern Powerhouse, she said: “None of us knows exactly what it is, but it shows that while cities compete we can do more when we collaborate. The Chinese understand the Northern Powerhouse though and love the scale of it.”
Bristol city’s elected mayor Marvin Rees (Lab) stressed the importance of understanding difference between ‘good’ and ‘bad’ economic growth.
He said a developer had asked him to support construction of luxury flats in an area of rapidly increasing house prices.
“Why would I support that?” he asked. “We have gentrification sweeping communities out and that turns into a cost elsewhere perhaps in mental health, school interventions and housing. It’s not just driving numbers; can we talk about economics with good outcomes for society?”
Meanwhile, Cllr Blake launched Core Cities’ report on Whole Place Leadership at today’s event.
She said: “Our report sets out how cities can help the country achieve the sustainable, inclusive growth the UK so badly needs. With the right tools we can shift the economy up a gear, whilst making sure everyone has the ability to share in future success.”